This article is from the WeChat public account: car stuff (ID: chedongxi) , author: James, formerly titled” difficult time European and American car prices: public day loss of 2.2 billion or forced layoffs, shutdown caused 1.1 million people affected in Europe “, the title figure comes from: IC photo
With the intensification of the impact of the epidemic on overseas auto companies, overseas auto manufacturing plants that have stopped production for nearly half a month have not yet reached resumption conditions. 55 of the 69 OEMs in North America have temporarily shut down and closed production, with a shutdown rate of 80%; Europe is even more serious. Only a Volkswagen Group car company has closed 72 factories in Europe, and the resumption time is also continuously delayed .
However, during the epidemic, the fixed costs of car companies were not small, and a large part of them was used for employees’ salaries. Automotive companies need to spend a lot of money after losing their income. Capital flows have gradually become a major problem, and some auto companies have even run into difficulties. Volkswagen Group needs 2 billion Euros per week for fixed costs. Capital liquidity has declined. Therefore, minimizing expenses and losses has become a top priority for car companies.
Recently, car companies such as Volkswagen Group, Ford Motor, General Motors, FCA, and car rental companies Hertz and Avis have all announced layoffs and salary reduction plans. Following Chinese car companies’ layoffs, overseas car companies Also began to cut costs significantly . At present, several overseas auto companies have announced salary reduction measures, and they have also laid off staff. If the situation worsens, they will survive by cutting staff.
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▲ Global auto and mobility industry layoffs and salary reduction statistics
At present, Ford Motor, General Motors, FCA executives and even ordinary employees of the three major US auto companies have all been paid a salary cut of at least 20%. Car rental companies Hertz and Avis have reduced their orders significantly. At present, layoff plans have been formulated, and company executives have collectively cut their salaries. In addition, the Volkswagen Group has said it may take layoffs.
While the new crown pneumonia epidemic continues to rag in Europe and the United States, a wave of layoffs and salary cuts are being staged in the European and American auto industries.
I. Volkswagen loses 2.2 billion, German 100,000 automakers face unemployment
Since March, new crown pneumonia has spread throughout Europe, and it has now covered all European countries. According to data published by the World Health Organization, as of March 31, 18:00 Central European Time (Beijing time, April 1, 1:00) , The number of confirmed diagnoses in Italy and Spain is 100,000 and 85,000 respectively, and the number of confirmed diagnoses has exceeded China. In addition, the number of confirmed diagnoses in Germany, a major industrial country in Europe, exceeded 60,000, and France also reached 43,000. The epidemic situation continued to worsen.
As the world’s largest car company, Volkswagen Group has been affected by the epidemic. According to statistics, Volkswagen Group has 124 factories and 617,000 employees worldwide. Among them, there are 72 factories in Europe, accounting for more than half of all factories. Beginning this month, Volkswagen will suspend production and production worldwide, and all Volkswagen Group plants in Europe and North America will be closed. It is not clear when the work will resume.
Recently, in an interview with German TV channel ZDF, CEO of Volkswagen Group Herbert Diess explained the current state of Volkswagen’s operations to the outside world.
He said that due to the new crown pneumonia epidemic, Volkswagen Group ’s sales outside China have been suspended, but 2 billion euros per week peopleCurrency) .
Diess was helpless in the show, saying If the epidemic continues to develop, Volkswagen Group may have to lay off employees to maintain the company’s operations.
▲ Herbert Diess, CEO of Volkswagen Group (right)
In addition, Frank Witter, chief financial officer of Volkswagen Group, recently told the Financial Times that if Volkswagen Group encounters a critical moment, it can also survive the crisis by issuing bonds.
At present, Volkswagen Group can issue up to 15 billion Euros in its financing plan. (about 117.9 billion yuan) Short-term debt of € 5 billion (about 39.3 billion yuan) can be issued to Belgium. In addition, the Volkswagen Group’s financial services department can independently issue up to 2.5 billion euros of (approximately 19.65 billion yuan) of bonds.
In total, the Volkswagen Group can issue approximately 22.5 billion euros of (approximately 175.1 billion yuan) of bonds. However, when Volkswagen Group really did not have any “surplus”, these bonds could only last for about three months.
Recently, foreign media German News Agency published an article by Ferdinand Dudenhoeffer, a research expert in the German automotive industry, which states that the German automotive industryFacing the problem of successive declines in production and overproduction. Affected by the epidemic, the production and sales of cars in Germany have almost stopped, and exports have also fallen sharply, and car companies will face huge losses. The number of unemployed in the German automotive industry is expected to reach 100,000 this year.
That is to say, nearly 1/8 of the 830,000 auto workers in Germany will be unemployed.
Dudenhoeffer believes that in recent years, German car production has been declining for years, and the car manufacturing industry is at a trough. According to statistics, Germany’s new car production in 2019 was 4.66 million, which has been reduced by more than 1 million compared with 2016. During the epidemic, the production and sales of automobiles in Germany have basically stopped, and the secondary and tertiary industries have been shut down for nearly half a month. At present, there are no signs of improvement.
▲ A Volkswagen Group’s OEM in Germany
In addition, the German automotive industry also faces the problem of being unable to export. According to the Leibniz Institute of Economic Research of the University of Munich, German exports will decline by 19.8% in March, the lowest monthly export volume since May 2009, and also the largest monthly decline in exports since the fall of the Berlin Wall.
In Germany’s domestic automobile manufacturing industry, more than 70% of new cars are exported, so the pressure on the export of the automobile manufacturing industry is even greater than the pressure on domestic sales.
Dudenhoeffer predicts that new car sales in Germany will decrease by 15% this year, about 3 million units; new car production will plummet, with only 3.8 million units expected. However, this is still optimistic. Dudenhoeffer believes that Germany’s new car production will be at least 3.4 million this year, which is equivalent to a further 1 million reduction on the basis of 2019, and production will fall by 27%.
According to the European Automobile Industry Association (ACEA) released the report. As of March 31, the average shutdown time of 229 auto assembly factories in Europe has reached 16 days, and 1.11 million auto manufacturing workers have been affected. Among them, Germany, the largest car manufacturing country in Europe, has affected 568,000 car manufacturing workers, accounting for about 51% of the total number of affected people.
II. GM’s global salary cut by 20%. Ford already has a layoff plan.
Germany, the strongest manufacturing country on the surface, is still like this, and manufacturing in other countries is facing a lot of difficulties. According to the data published by the World Health Organization, the number of confirmed cases of new crown pneumonia in the United States has exceeded 140,000, and the severity of the epidemic has exceeded China. According to data released by the American Automobile Innovation Alliance, 55 of the 69 OEMs in North America have been temporarily closed. The shutdown rate has reached 80%, and US OEMs have closed 93%.
▲ North American OEM shutdowns as of March 26
At present, the three major US auto companies GM, Ford, and Fiat Chrysler (hereinafter referred to as FCA) have been discontinued, For nearly half a month, there have been fixed cost expenditures every day, and the losses faced by the suspension of production have gradually increased. Recently, although several car companies have recently been approved to produce medical supplies, the production of these products does not solve the plight of car companies.
Before, the three major US auto companies had planned to resume work on March 30, but as far as the current situation is concerned, there is no sign of resumption of work. Ford previously postponed the resumption of work at four of its plants to April 6 at the earliest, and delayed the resumption of work at five other plants until April 14. March 31, BlessingSpecial news is released again, all factories in North America are suspended indefinitely until the epidemic is effectively controlled.
The suspension caused car companies to run into trouble. General Motors adopted austerity measures from March 24 and raised a large amount of cash to deal with the crisis. In addition, the three major US auto companies have also released news through different channels to reduce the company’s operating costs. Pay reductions and layoffs are the first things that auto companies do.
1. 300 Ford executives will be paid lower next month
Recently, a report from CNBC revealed that Ford Motor Chief Executive Officer Jim Hackett sent a letter to employees worldwide on March 26. He said that Ford’s goal is to respond to the crisis without layoffs, and that no Ford employee’s work is in danger at present.
However, if the new crown pneumonia epidemic intensifies again, Ford may take more actions to ensure the normal operation of the company.
▲ Ford F-150 pickup truck factory
Ford has formulated a cost reduction plan based on current operating conditions. From May 1st, 300 Ford executives will be paid a salary cut ranging from 20% to 50%. The pay reduction time is at least 5 months. Ford Chairman Bill Ford had no salary during this period and was reissued after the company’s normal operations. In addition, all employees of Ford have been postponed overtime and performance pay, and the company has suspended the recruitment of new employees.
At the same time, Hackett, Ford’s chief executive, also promised that no layoffs would be taken at this stage. However, he said that if the outbreak worsens, Ford will not be able to carry out production and marketing for a long time, and layoffs cannot be avoided.
2. All GM employees have their salary cut by at least 20%
On March 26, GM issued an internal announcement saying that the company needs to take immediate measures to reduce costs, including reducing salaries for all regular employees, but no notice of layoffs. GM plans to adopt different pay reduction strategies for employees at different levels.
▲ General Motors Plant
First, there are 69,000 regular employees worldwide. From April 1st, each person’s salary will be reduced by 20%, and the salary reduction will last for about 6 months. At present, formal GM employees account for 42% of the total number of employees, and informal employees may be less protected.
For GM executives, starting April 1, the salaries of senior leaders will be reduced by 30%, the salaries of other executives will be reduced by 25%, and the salaries of GM board members will be reduced by 20%.
GM has promised that employees’ health care benefits will not be affected during the pay cut. For ordinary employees and some executives, the salary currently temporarily deducted will be reimbursed before March 15, 2021. However, the salary cuts for board members will not be reissued.
Also, as approximately 6,500 engineering and manufacturing workers at GM’s U.S. plant are currently unavailable and are all regular employees. These workers are currently in the state of “leave home” and can receive 75% of their salary during the shutdown.
3. Most FCA employees around the world cut their salary by 20%
According to a foreign media Reuters report, a memo from FCA CEO Mike Manley shows that from April 1, FCA alsoThree months of pay cuts will be implemented.
▲ FCA CEO Mike Manley visited the US pickup truck factory last month
Among them, FCA CEO Mike Manley’s salary will be reduced by 50%. FCA chairman John Elkann and members of the board of directors will cease pay from April 1 until early next year. The 19 members of the FCA Executive Committee will receive a 30% salary cut. In addition, most of FCA’s employees around the world will also temporarily reduce pay by 20%.
Manley said that the FCA hopes that its employees will not be affected by local shutdowns and a temporary pay cut of 20% is to avoid layoffs. However, he did not promise when the salary will be repaid.
Three car rental giant orders plunge Avis executives collective salary cuts
In the spread of the new crown pneumonia epidemic, the most injured are manufacturing and service industries. Manufacturing car companies continue to report layoffs, and service companies are not immune. Hertz and Avis, two large car rental companies in the United States, have announced that they will reduce operating costs. At the same time, the necessary testing work of some autonomous driving companies was also suspended in the middle of this month. As of now, the impact of the shutdown on autonomous driving companies is not obvious.
1. Car rental company orders have plummeted and layoffs have begun
Car rental company Hertz has suspended operations since March 21 and has been out of service for more than a week. Affected by the new crown pneumonia epidemic, HErtz’s car rental service has basically stopped.
Hartz CEO Kathryn Marinello said recently that the company has started layoffs to ensure normal operations. “We have never experienced such a large-scale shutdown, which has had a profound impact on our business. We have witnessed a sharp decline in North America,” Hertz Chief Operating Officer Paul Stone said in a letter to employees. Travel needs. “
Hertz will fire some employees and will not issue unemployment benefits, but will retain medical benefits for terminated employees. In addition, some vehicles available for hire have also been suspended.
And another car rental company, Avis, faces more severe operating pressure. Avis said on its official website that due to the epidemic, the scheduled volume of various businesses in April this year fell by 60%, so the company needs to adjust its operating plan.
▲ Avis issued a statement to reduce operating costs
Avis said that this year’s goal is to reduce operating costs of US $ 400 million (about 2.8 billion yuan) . Among them, the leadership team and senior employees will reduce their salaries and lay off staff.
2. The ride-hailing company recommends that the driver temporarily change to be a delivery person
Affected by the epidemic, orders from ride-hailing companies Alto, Lyft, and Uber have fallen sharply, and ride-hailing drivers are at risk of disruption. Will Coleman, founder and CEO of Alto, said recently that business volume had plummeted in March, and the number of passengers had fallen by 75% within a few days.
Alto recently updated its information on its website. It is recommended that the driver of the online rental car cooperate with local merchants and enterprises to work as a local delivery person while operating the online rental car. This will alleviate the pressure on local distribution services and ease the problem of declining driver income.
▲ Alto’s advertising on the homepage of its website
In addition, ride-hailing company Lyft has also announced that it will cooperate with San Francisco Bay Area government agencies and non-profit organizations to start trial meal delivery services. In addition, an email sent by Lyft to the ride-hailing driver indicates that if the driver encounters difficulties in income, it is recommended to work for Amazon, because Amazon is hiring 100,000 delivery employees.
Uber, a travel service company, has been encouraging ride-hailing drivers to be both drivers and delivery agents. As a result, during the epidemic, Uber said demand for food delivery was increasing exponentially.
Pierre-Dimitri Gore-Coty, head of Uber ’s Eats food delivery service, said recently that Uber ’s food delivery service has not been affected by the epidemic, but that people are increasingly relying on food delivery services.
3. The impact of autonomous driving companies is not yet obvious
On March 17, local time, Waymo, Cruise, and ArgoAI, which are conducting self-driving tests in California, have successively announced that they will suspend self-driving tests that require in-car safety officers to prevent the epidemic from continuing to spread.
Waymo will suspend its Waymo One ride service. At the same time, autonomous driving tests that require safety officers in the car will also be suspended.get on. However, Waymo said the completely self-driving test program will not be interrupted to ensure that local cargo transportation is not affected.
▲ Cruise self-driving cars
Cruise, an autonomous driving company owned by General Motors, said that Cruise has been temporarily suspended and it is expected to resume work in three weeks. Cruise’s chief human resources officer, Arden Hoffman, said that during the shutdown, Cruise will pay employees full pay for the workday.
In addition, Ford’s self-driving subsidiary ArgoAI also said that it has temporarily suspended self-driving vehicle testing, but the company has not been affected by any major impact due to the epidemic.
However, since most autonomous driving companies are “throwing money” projects, even if they can carry passengers, they cannot charge passengers. Perhaps this is why autonomous driving companies have not been affected for the time being.
Conclusion: The impact of the epidemic on the global economy has gradually deepened
Under the epidemic situation, major auto companies around the world have actively helped “resistance to the epidemic,” but prolonged shutdowns and production shutdowns have made some powerful auto companies unable to bear. At the beginning of March, a large-scale wave of wage reductions also emerged in China’s independent auto companies, and with the resumption of work and production, the last resort for reducing wages and laying off employees will gradually fade.
Today, more than 700,000 patients have been diagnosed with new coronary pneumonia worldwide, and the impact of the epidemic on the global economy will gradually deepen. This requires every individual, every government and other organizations to work together to overcome the epidemic as soon as possible and usher in the real spring of this year.
This article is from the WeChat public account: car stuff (ID: chedongxi) , author: James